ATLANTA — Columbia Healthcare Corp. and Galen Health Care Inc. jointly announced the signing of a merger agreement Thursday, creating the second-largest U.S. hospital management company.
The stock deal is worth $3 billion, a Galen official said.
The new company, with assets of $4.5 billion, would own and operate 99 hospitals with 22,000 licensed beds in 19 states and two foreign countries. The new company's annual revenue is expected to exceed $5 billion.
The merged company would be second in size only to HCA-Hospital Corp., said Galen investor relations director Richard Lechleiter. Galen is based in Louisville, Ky.
"We think the combined companies can grow faster than they could apart," he said.
The move would save $30 million annually on Galen's national purchasing contracts and credit access by eliminating duplicate administrative costs.
The deal was announced after the close of trading on the New York Stock Exchange. Galen shares, which had closed up 12.5 cents at $14.125 in NYSE trading, jumped 87.5 cents to $15 in Pacific Stock Exchange late trading. Columbia was off 25 cents at $25.50 in NASDAQ trading.